How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs. Net Costs

12/01/2001

The net cost per program group member is the gross cost per program group member minus what would have been spent in the absence of the NEWWS programs, represented by the gross cost per control group member. (See Figure 13.1, Box 11.) As shown in Table 13.4 (column 3), net costs ranged from about $2,000 (Grand Rapids LFA and Detroit) to $5,480 (Atlanta HCD). Depending on the rate of participation, and the types of activities in which control group members enroll on their own, programs with high gross costs can have low net costs. For example, although Grand Rapids HCD had the highest gross costs, owing to high participation rates in education and training activities, similarly high participation rates in these activities among control group members resulted in a net cost that was lower than costs for the other education-focused programs. Likewise, Grand Rapids LFA and Portland had the highest gross costs among the employment-focused programs, but high gross costs for control group members produced low net costs for these two programs. As a result, the average net cost of the NEWWS programs was similar to that of the GAIN program.

Table 13.4
Estimated Gross and Net Costs Within a Five-Year Follow-Up Period,
by Program and Service Component (in 1999 dollars)

Program and Component

Total Gross Cost per Program Group Member ($) Total Gross Cost per Control Group Member ($) Total Net Cost per Program Group Member ($)

Atlanta Labor Force Attachment

Orientation and appraisal 72 11 61
Formal assessment n/a n/a n/a
Job search 1,104 79 1,025
Basic education 829 166 663
Post-secondary education 871 844 27
Vocational training 2,072 1,392 680
Work experience 323 126 198
Subtotal (operating) 5,271 2,618 2,654
Child care 1,491 459 1,032
Other support services 317 29 288
Total 7,080 3,105 3,974

Atlanta Human Capital Development

Orientation and appraisal 72 11 61
Formal assessment n/a n/a n/a
Job search 530 79 452
Basic education 1,596 166 1,429
Post-secondary education 898 844 54
Vocational training 3,219 1,392 1,827
Work experience 261 126 135
Subtotal (operating) 6,576 2,618 3,958
Child care 1,400 459 940
Other support services 610 29 581
Total 8,585 3,105 5,480

Grand Rapids Labor Force Attachment

Orientation and appraisal 18 1 17
Formal assessment 9 n/a 9
Job search 1,422 329 1,093
Basic education 1,368 1,170 198
Post-secondary education 3,314 2,906 408
Vocational training 1,804 1,931 -127
Work experience 183 54 129
Subtotal (operating) 8,118 6,392 1,726
Child care 762 561 202
Other support services 60 n/a 60
Total 8,940 6,953 1,987

Grand Rapids Human Capital Development

Orientation and appraisal 18 1 17
Formal assessment 312 n/a 312
Job search 754 329 425
Basic education 2,589 1,170 1,419
Post-secondary education 3,582 2,906 675
Vocational training 2,018 1,931 87
Work experience 271 54 216
Subtotal (operating) 9,544 6,392 3,151
Child care 1,108 561 548
Other support services 75 n/a 75
Total 10,727 6,953 3,773

Riverside Labor Force Attachment

Orientation and appraisal 111 n/a 111
Formal assessment 6 n/a 6
Job search 1,202 149 1,053
Basic education 728 230 498
Post-secondary education 2,189 1,301 889
Vocational training 1,075 856 218
Work experience 281 126 155
Subtotal (operating) 5,593 2,661 2,931
Child care 281 63 218
Other support services 171 n/a 171
Total 6,045 2,724 3,320

Riverside Human Capital Development
(without a high school diploma or GED)

Orientation and appraisal 107 n/a 107
Formal assessment 13 n/a 13
Job search 1,177 127 1,050
Basic education 2,900 409 2,491
Post-secondary education 580 606 -26
Vocational training 1,049 820 229
Work experience 261 63 198
Subtotal (operating) 6,086 2,025 4,061
Child care 376 35 342
Other support services 170 n/a 170
Total 6,632 2,059 4,573

Columbus Integrated

Orientation and appraisal 18 n/a 18
Formal assessment n/a n/a n/a
Job search 156 31 125
Basic education 700 180 520
Post-secondary education 2,860 606 2,254
Vocational training 1,283 593 690
Work experience 254 25 229
Subtotal (operating) 5,271 1,434 3,837
Child care 1,129 1,084 45
Other support services 334 33 301
Total 6,734 2,551 4,183

Columbus Traditional

Orientation and appraisal 9 n/a 9
Formal assessment n/a n/a n/a
Job search 192 31 161
Basic education 796 180 616
Post-secondary education 2,620 606 2,014
Vocational training 1,158 593 566
Work experience 194 25 169
Subtotal (operating) 4,969 1,434 3,534
Child care 1,131 1,084 47
Other support services 224 33 190
Total 6,323 2,551 3,772

Detroit

Job search 565 328 237
Education and traininga 4,481 2,830 1,651
Work experience 80 12 67
Subtotal (operating) 5,126 3,170 1,956
Child care 748 734 14
Other support services 117 34 83
Total 5,990 3,937 2,053

Portland

Orientation and appraisal 149 n/a 149
Formal assessment n/a n/a n/a
Job search 754 273 481
Basic education 997 593 404
Post-secondary education 1,591 2,353 -763
Vocational training 1,941 1,049 892
Work experience 414 240 174
Subtotal (operating) 5,846 4,508 1,337
Child care 2,926 1,542 1,384
Other support services 159 15 144
Total 8,930 6,065 2,865
SOURCES: See Table 13.3.
NOTES:  Rounding may cause slight discrepancies in calculating sums and differences.
N/a = not applicable.
a Owing to data limitations, in Detroit it was not possible to separate vocational training, post-secondary education, and basic education costs. Thus, the gross costs of all three activities are included in the cost of "education and training." Furthermore, in this site orientation and assessment costs are spread across these three activities.

Net costs were generally lower for employment-focused programs than for education-focused ones, largely due to the particularly low net costs in Grand Rapids LFA and Portland. As the two-year findings suggested, the Grand Rapids LFA program may have diverted program group members into job search who would have enrolled on their own in education or training programs. The same may have been true of the Portland program.